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American Battery Startup Goes Public

BorgWarner affiliate targets commercial truck market
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A new name is joining the ranks of electric vehicle battery suppliers: Romeo Power.

The company is being created through a reverse merger between Romeo Systems and RMG Acquisition, a special-purpose acquisition company that launched its own IPO in early 2019.

The merger, which is expected to close later this year, is due to raise about $384 million. Romeo will use the proceeds to expand its research and development efforts.

American Made

Formed in 2016, Romeo Systems is headquartered in Vernon, Calif. This makes it one of the few U.S.-based EV battery suppliers (Tesla and Lucid Motors eventually aim to produce their own batteries).

The company, which produces battery modules and packs, recently completed construction of a 7-GWh assembly plant in Los Angeles.

Romeo says it has tested more than 200 battery cells from 10 suppliers. To date, it has approved four cell designs.

Heavy-Duty Tech

Initially Romeo is focusing on the commercial vehicle market.

The company says it has orders from most Class 8 truck companies operating in North America. It also supplies batteries for buses and medium-duty trucks.

Romeo claims its batteries have as much as a 25% greater energy density—thanks to improved thermal management—than those currently used in electric commercial trucks. The design enables a longer lifecycle and shorter charging times, according to the supplier.

Partners

Romeo has a European manufacturing joint venture with BorgWarner, which provided the startup with a $50 million investment last year.

The battery supplier also has a partnership with another one of its investors, recycling specialist The Heritage Group. As part of a pilot program, the two companies plan to convert 500 diesel-powered trucks in Heritage’s fleet to electric power.

Heritage also is partnering with Heritage on a recycling center for Romeo’s batteries.

Republic Services, which placed an order for 2,500 electric garbage trucks from Nikola in August, also is investing in Romeo.

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